Monday, November 30, 2009

Dubai's government TV channel's news today had a segment about the world's confusion between Dubai government and commercial companies' debt. Al Saleh said the media has mixed up the relationship between Dubai World and the Government of Dubai. “(Dubai World) is a company set up with commercial basis and its transactions with creditors and investors were based on that respect.”

He added that the group used to get financing based on its commercial status and feasibility of its projects. “The gross mistake of the media is that they deem the company as part of the government. It is baseless,” he said.

Christian Science Monitor writes: some analysts say last week's stock market reaction was overblown. Dubai World's debts pale in comparison to the trillions of dollars American banks lost last year and these analysts argue that Dubai's problems are unlikely to spread to other highly indebted countries such as Greece or Spain.

For now the economic fallout from Dubai World may be exacerbated by the emirate's continued lack of transparency about its financial health. Investors have expressed frustration that Dubai hid its debt problems – even from Abu Dhabi, which was caught off guard by last week's announcement. It refused to reveal its total debt, estimates for which range from $80 billion to $150 billion.

Officials continued to suppress information over the weekend, blocking distribution of the Sunday Times, a British paper, which offered a two-page spread about Dubai's debts.

With Dubai's saga continues to attract major attention, it is expected that most investors will have to think more careful, or revise their plans and strategies on similar property development projects all over the world.

Iskandar will not be immune to the crisis and perhaps the total investment $13 billion mentioned by Johor Chief Minister is real figure to be translated into real development.....

Iskandar zone not affected by Dubai crisis

KUALA LUMPUR - The Malaysian state of Johor said its economic zone, which has the nation’s largest number of Middle Eastern investors, should be unscathed by the Dubai debt crisis, reports said Sunday.Dubai World, the city state’s flagship conglomerate announced Wednesday that it was seeking a six-month reprieve from its $59 billion debt payments, sending global stocks into a nosedive on fears of a default.The chief minister of southern Johor state, Abdul Ghani Othman, told the Star daily only one Dubai company, Damac Properties, had invested in the Iskandar special economic zone.“Since only one company from Dubai is involved in Iskandar, we don’t think the Dubai financial crisis would have an effect on the regional growth area,” he told the paper.“Most of the investors in the growth area are from Saudi Arabia, Kuwait and Abu Dhabi,” he added.He did not say how much Damac had invested in Iskandar, where the company is involved in a project on an eight hectare (20 acre) site.An aide to Abdul Ghani confirmed his comments to AFP on condition of anonymity, saying the Dubai company had yet to begin operations in the area. He said total investment for Iskandar, which was launched in 2006, had hit $13 billion so far, with about 15 percent coming from Middle Eastern investors. Almost three times bigger than neighboring Singapore, the Iskandar region will be Malaysia’s largest economic zone upon completion in 2025, by which time the government hopes to have created 800,000 jobs and attracted around $100 billion in investment. - AFPIt wa mostly construction companies that have been affected by the downturn in Dubai. Construction giant Murray & Roberts, which benefited handsomely from the boom in the region recent years, announced earlier this year that a big contract for Dubai International Airport had been withdrawn, along with another for the Trump Towers Dubai.The company was confident it would receive money owed for work already carried out on the airport. – Agencies